FUNDS 13.5 FUNDS 13.5 Real Estate Investment Trusts (REITs)
FUNDS 13.5.1(1) A Fund Manager, or any other Authorised Person making an Offer of a Unit of a Domestic Fund or otherwise marketing a Domestic Fund, must not include the term "Real Estate Investment Trust" or "REIT" or refer to a Fund or otherwise hold out a Fund as being a Real Estate Investment Trust or a REIT, unless it is a Public Property Fund which complies with (2).(2) A REIT is a Public Property Fund which:(a) is primarily aimed at investments in income-generating Real Property; and(b) distributes to the Unitholders at least 80% of its audited annual net income.(3) If at any time during the operation of the Fund the requirements in Rule 13.5.1(2) are not met, the Fund Manager, and, if appointed the Trustee, must immediately notify the Regulator of the failure to meet the requirements in these Rules and what measures have been or will be taken to remedy the breach
Amended on (3 February, 2020).
FUNDS 13.5.2(1) A Fund Manager of a REIT must ensure that it distributes to the Unitholders as dividends each year an amount not less than 80% of its audited annual net income.(2) The persons providing oversight functions in respect of the Fund must determine if any:(a) revaluation surplus credited to income, or(b) gains on disposal of Real Property,shall form part of net income for distribution to Unitholders.
Where a REIT holds any Real Property via one or more Special Purpose Vehicles, the Fund Manager must ensure that each Special Purpose Vehicle distributes to the Fund all of its net income as permitted by the laws and regulations of the jurisdiction where the Special Purpose Vehicle is established.
FUNDS 13.5.4(1) A Fund Manager of a REIT must ensure, subject to (2), that any investment made in respect of property under development whether on its own or in a joint venture is undertaken only where the REIT intends to hold the developed property upon completion.(2) The total purchase price and development cost of the property under development in (1) must not exceed 30% of the net asset value of the Fund Property of the REIT.(3) For the purposes of this Rule 13.5.4, the Regulator would not consider property development activities to include refurbishment, retrofitting and renovation.
FUNDS 13.5.5 FUNDS 13.5.5
A Fund Manager of a REIT may borrow either directly or through its Special Purpose Vehicle up to 65% of the total gross asset value of the Fund.
Remedial action may not require the disposal of Fund assets to pay off part of the borrowings where such disposal would be prejudicial to the interest of Unitholders.